Key telecoms markets are attracting some wise players

The markets in private 5G networks and SD-WANs continue to see significant investment and acquisition activity.  Business technology journalist, Antony Savvas looks at some of the latest developments.

In a major move to expand its regional reach, telecoms infrastructure firm BAI Communications has acquired wireless network deployment specialist Vilicom.

European expansion

The deal represents a major expansion of BAI’s business in the UK and Europe, “accelerating its growth strategy in the region,” it says.

Vilicom delivers private 4G- and 5G-based mobile services, with more than 1,500 projects to date. It provides consultancy, design, optimisation, testing and systems integration. Customers span a range of sectors including healthcare, real estate, retail, hospitality, energy and mobile network operators.

Major projects by Vilicom include Dublin Airport Terminal 2, Premiership football stadiums, Ireland’s Croke Park sports stadium, Bristol Myres Squibb‘s billion-dollar biologics plant, as well as the Moray East offshore windfarm in Scotland (where Vilicom designed a bespoke private network covering an area of 295km²).

Volkswagen

Demonstrating the wider opportunities in the market, Nokia has just announced it has deployed a private 5G standalone network for Volkswagen, at the car maker’s main plant in Wolfsburg, Germany. The network uses Nokia’s Digital Automation Cloud (DAC) technology to provide “reliable, secure and real-time connectivity”, says Nokia, enabling Volkswagen to trial new smart factory use cases.

Volkswagen will be testing whether the technology can increase efficiency and flexibility in car production. DAC promises to deliver high-bandwidth and low-latency connectivity to sensors, machines, vehicles and other equipment. Initial use cases include the wireless upload of data to manufactured vehicles and the intelligent networking of robots and wireless assembly tools. The deployment ensures all data remains on campus, with it processed at the network edge in real time, giving Volkswagen full control.

Bringing scale

In BAI’s case, the company said its acquisition would combine its investment capability with Vilicom’s technical expertise to “bring scale” to its private 5G networks business. Vilicom’s communications as-a-service platform, as well as serving the needs of big-scale projects, also provides indoor cellular coverage for smaller venues, which helps to grow the overall market beyond the marquee projects we tend to hear about, like at Volkswagen.

“Vilicom is helping to enhance connectivity for all, and by investing in its growth we can transform access to high-speed mobile coverage,” says Billy D’Arcy, CEO of BAI Communications UK.

BAI has already been involved in recent mergers and acquisition activity, having this October completed its acquisition of Mobilitie, one of the largest privately-held telecoms companies in the US.

Going underground

In the UK, also this year, BAI was awarded a 20-year concession from Transport for London to deliver high-speed mobile on the London Underground. It also signed a 20-year strategic partnership with Sunderland City Council in north-east England, to create what it describes as the “UK’s most advanced smart city”.

BAI’s operations currently span Australia, Canada, Hong Kong, the UK and the US, while Vilicom is active in over 20 countries. The way BAI is currently expanding there will be no surprise if it goes further down the acquisition path. If a bet was in question, my money would be on a European deal in the short- to medium-term.

A secure edge

Meanwhile, in another growing market, Cato Networks, which is now a prominent player in the SD-WAN and SASE (secure access service edge) segment, is this week expected to announce significant investment from a telco player. This new investor is keen to tap into the opportunities as organisations look to move their data and business operations to the edge and offer better protection to remote workers.

A big number

Only last month, Cato Networks completed a US$200 million (€177 million) funding round with a market valuation of $2.5 billion (€2.2 billion). The next expected investment should greatly bump up that valuation. And it will further underscore the growing interest that communications service providers (CSPs) are showing in the massive SASE opportunity, as it converges the markets for SD-WAN, NGFW (next generation firewall), SWG (secure web gateway), CASB (cloud access security broker) and ZTNA (zero trust network access).

Last December, Cato automated SASE provisioning and monitoring with the Cato Cloud API. The API enables CSPs and MSPs (managed service providers) to integrate Cato into their service portfolio. And this April, KDDI in Japan, announced the worldwide availability of Cato’s cloud-native SASE services.

Strategic CSPs

“Cato sees CSPs as strategic partners in our journey to transform and optimise the way organisations deliver networking and security capabilities to their employees worldwide,” says Shlomo Kramer, CEO and co-founder of Cato Networks.

Like with private 5G networks, the number of players in the SASE market is beginning to look crowded, but there is seemingly plenty of investment to go round.

Arm(s) length

As predicted, Nvidia‘s $40 billion-plus acquisition of chip designer Arm would struggle to get approval from global regulators, and so it is proving.

With British, European Commission and Chinese regulators still closely studying the market implications for the proposed deal, the FTC (Federal Trade Commission) in the US is now going to court to block it happening.

A big victory

This is a big victory for leading technology companies that have come out against the deal, that include the likes of Qualcomm and Google. By still insisting that it should be allowed to buy Arm, the only thing Nvidia is definitely doing is driving up the value of a company it probably has no chance of buying outright.

The publicity around the stalled transaction is driving up the market valuation well above the $40 billion Nvidia wants to pay. The real struggle now seems to be between the New York Stock Exchange and the London Stock Exchange, as Arm owner and technology investor Softbank reportedly plans to float the company, to greatly cash in on its wise 2016 investment.

Antony Savvas

World domination

Nvidia already has quite enough of the chip business to make sure it is in a prime position to take advantage of new data processing markets. While it has easy access to the licensed chip designs and technologies that Arm is prolific at continually launching, just like everyone else, it should quietly accept what the rest of the technology market accepts, that Arm should not be owned by one company seeking world domination.

The author is Antony Savvas, a global freelance business technology journalist.

Comment on this article below or via Twitter: @VanillaPlus OR @jcvplus

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